LowCVP: Work continues despite COVID-19

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LowCVP electric bus

As the shutters are slowly drawn down on businesses in the north and much of the country prepares for the impact of a second wave, the government is quietly working away on the Green Recovery and the National Bus Strategy.

We understand the government is assessing options for an emergency bus fund to help operators purchase vehicles and support manufacturing jobs. This fund would be restricted to this year and potentially provide a greater level of support than in ‘normal times’. However, as with all government support, State Aid rules are crucially important and legal implications of any Covid-response scheme are currently being considered.

The National Bus Strategy (NBS) is set to have a clear action list of how the government will support the industry reverse pre-Covid decline.

Although currently subject to the Spending Review, there is an expected £3bn for new buses and infrastructure to help improve speeds and importantly a step change in funding to achieve 4,000 new zero emission buses by 2025. This all feeds into the wider work for the Transport Decarbonisation Plan, which is to be presented at COP26 in 2021.

As part of this work, the government is considering a variety of proposals about how to flip the market from diesel to zero emission. As we know the shift to zero emission is the right one as it improves local air quality and if the fuel/energy is low carbon, it also supports our net-zero targets. However, these new technologies are more expensive than diesels and require investment in refuelling and charging infrastructure.

To kick start the zero-emission bus market, the government is considering investing around £1bn in support for the purchase of new buses and infrastructure. The two most popular ideas currently are through either a “plug-in” bus grant or through a leasing scheme.

The plug-in bus grant would see bus manufacturers and dealers be able to claim a fixed amount of money per bus from the government, as is the case with cars, vans and trucks through the plug-in vehicle grant. This would remove the long application times and delays with announcements we see with existing competition schemes.

The second option being considered is a financing and leasing arrangement, where government or a third party either partially or wholly owns zero emission buses and then leases them out to operators over a fixed period. This would remove a bottleneck in current leasing options where there is much uncertainty around the residual value of zero emission buses. This could work separately or in conjunction with a plug-in bus grant.

BSOG is also being looked at although government does not seem keen to change incentives for Low and Ultra Low Emission Buses at present.

So, despite the sad potential of more restrictions, the government has not forgotten its commitment to reinvigorate the UK bus industry.

LowCVP are discussing some of these key challenges ahead for the at our Bus Working Group this week on the 15th October. We are also hosting a Coach interest group meeting on the 29th October. Get in touch via Daniel.hayes@lowcvp.org.uk